Hi
Ethernet as a plug or board is a very good idea!
I'm currently using a Arduino, the official WisNet shield and a radio-module on a breadboard shield. As long as you only need to push data to e.g the Pachube site it works well and the limited number of incoming connection is not a problem.
The software in my system is designed to solve only one task but it should be relatively easy to develop a sketch for the ethernet node that has a configure block in the beginning letting the user map the incoming bytes to “ASCII” in valid xml and push it out on Internet. E.g
…
<Node>
<ID>6</ID>
<Temp>22.3</Temp>
</Node>
...
Maybe power over ethernet should be considered? I don't think battery is an option unless you use a very exotic WiFi module but I maybe wrong?